OPG, Capital Power to Explore Small Modular Nuclear Reactors in Alberta

Ontario Power Generation (OPG) and North American power producer Capital Power Corp. will jointly examine the feasibility of developing small modular reactors (SMRs) in Alberta, including possible ownership and operating structures.

The companies on Jan. 15 said they would complete a feasibility assessment within two years “while continuing to work on the next stages of SMR development.”

Capital Power, a publicly traded company headquartered in Edmonton that holds a 7.7-GW, 30-facility fleet, said the partnership with OPG presents a new potential pathway with which the company can meet demand growth. “We are at the forefront of electrification, which will drive continual growth in demand for power. The deployment of SMR technology will provide an important source of safe, reliable, flexible, affordable, and clean baseload electricity in Alberta in the future,” noted Avik Dey, Captial Power president and CEO.

A Fresh Opportunity for Energy-Intensive Alberta

The development also opens a pivotal opportunity for Alberta, Canada’s most energy-reliant province. According to the Alberta Electric System Operator (AESO), a non-profit entity that manages and operates the provincial power grid, the province is powered by 426 qualified generating assets with a combined capacity of 18.3 GW. As of January 2024, the region had a combined maximum capacity of 20 GW. More than 71% of its power was gas-fired, 9% wind, 7% coal, 5% solar, 4% dual fuel, and 2% hydro.

But AESO notes the province’s grid is rapidly transforming. In step with the provincial government’s enactment of a coal phaseout in 2015, Alberta is now down to only two coal power units: the 400-MW Genesee Unit 1 and the 420-MW Unit 2, which Capital Power owns and operates.

Capital Power is scheduled to complete the units’ repowering by 2024 with natural gas combined cycle technology. The units will use Mitsubishi Power M501JAC gas-fired combustion turbines and Vogt triple-pressure heat recovery steam generators to boost their combined capacity to 1,332 MW. Capital Power also owns and operates the 466-MW Genesse Unit 3, a dual-fuel facility that completed upgrades in 2023 to enable it to burn 100% natural gas as its primary fuel source.

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Still, the AESO has cautioned that decarbonizing its power system by 2035 as proposed by Canada’s August 2023–released draft Clean Electricity Regulations (CER) is not feasible. “Unlike other provinces, Alberta does not have enough non-emitting base load electricity like hydro and nuclear. Nor is there enough time to build these by 2035,” the Alberta government noted in September 2023, as part of its response to the CER.

“To reach net zero, we would need to transform our entire power system—which took decades to develop—in just 12 years. The province has a plan to keep rapidly cutting GHG emissions as we approach 2035, but achieving net zero electricity by that time isn’t feasible or realistic,” it said. 

The province has underscored that Alberta has limited intertie connection capacity with neighboring jurisdictions, and it cannot rely on significant increases in non-emitting imports/exports to balance its system because “current ties are constrained. “Increasing intertie capability by significant volumes to balance intermittent generation across regions will take significant time and coordination between jurisdictions, beyond the 2035 horizon,” it notes.

Meanwhile, implementing carbon capture on its natural gas power fleet will require federal clarity, and supportive infrastructure could take “many years to develop, approve, and operationalize,” it suggests. And while Alberta leads Canada’s wind and solar power production, their intermittency poses reliability impacts.

Alberta has suffered several close calls, especially during relatively colder months, events that it says showcase “the importance of having sufficient stable baseload power sources like gas, hydro and nuclear.” So far this year, it issued an alert on Jan. 13, as the grid operator warned supply shortfalls could amount to up to 200 MW amid extreme cold temperatures in western Canada, restricted imports, and very high demand. It issued another alert for Jan. 15, citing extreme cold and several power facility outages. 

Cautiously Supportive of New Nuclear

Alberta is supportive of new nuclear, though it underscores limitations. In March 2022, the province joined New Brunswick, Saskatchewan, and Ontario in a joint strategic plan outlining a path forward on SMRs. In a 2022 study evaluating its net-zero options, AESO noted SMRs “provide promising opportunities” if cost declines materialize or technologies advance dramatically. It suggests, though, that the probability of these technologies maturing and commercializing before 2035 is “highly unlikely.”

Nuclear facilities “tend to have relatively high capital costs compared to other generation technologies. The long development timelines and high capital costs challenge merchant power investment in nuclear-fission generation technology. Financial support, financial guarantees, or long-term contracts are likely required to develop nuclear fission power stations in Alberta at the time of publishing this report,” it said.

The grid operator however has recently acknowledged the value in “monitoring and learning from other jurisdictions’ experiences deploying utility-scale electricity generation projects.” Several provinces are watching OPG’s first SMR deployment, which will begin with the construction of the first GE Hitachi BWRX-300 reactor at its Darlington New Nuclear Project (DNNP) site east of Darlington Station in Bowmanville, Ontario.

In July 2023, the Ontario government also announced approval to proceed with planning and licensing for three additional SMRs for a total of four SMRs (a combined 1.2 GW) at the DNNP. OPG has said developing DNNP as a four-unit site has cost benefits related to common cost sharing associated with the first unit’s installation, allowing the plant to perform more competitively compared to other forms of clean power generation. 

The Darlington New Nuclear Project site in Clarington, Ontario. Courtesy: CNW Group/Ontario Power Generation Inc.

The Darlington New Nuclear Project site in Clarington, Ontario. Courtesy: CNW Group/Ontario Power Generation Inc.

During a public information session in November 2023, Karim Osman, DNNP engineering director, said OPG expects a license to construct from the Canadian Nuclear Safety Commission (CNSC) in 2024, with the first round of public hearings focused on the environmental assessment for all four units scheduled this month. In fall 2024, a public hearing related to the license for the first unit will commence. “We expect to have our first unit ready for commercial operation in 2029. Upon completion of the construction of Unit 1 is when, with the requisite approvals, we would be proceeding with Units 2, 3, and 4, and that would take us through from 2034 through 2036.”

Saskatchewan provincial utility SaskPower in June 2022 also selected the BWRX-300 for the province’s first two potential nuclear units, and it later shortlisted two site study areas for evaluation: Elbow and Estevan. However, SaskPower intends to decide if it will build a BWRX-300 project in 2029, potentially allowing it to leverage OPG’s experience, knowledge, and expertise. SaskPower anticipates construction of its first SMR could begin as early as 2030, with a targeted in-service date of 2034.

If Capital Power embarks on building SMRs, they won’t be the first nuclear units developed for Alberta. In 2005, efforts began to develop the four-unit Peace Region Nuclear Power Plant Project in the Peace River region of Alberta, a major oil sands area, with the intent of utilizing nuclear energy for the oil sands and partly replacing natural gas for energy production for bitumen extraction and processing. But while Ontario-based Bruce Power adopted the C$10 billion project with its acquisition of Energy Alberta in 2008, the company abandoned its plans in 2011, saying it would instead focus investments on increasing reliability and safety at its existing Bruce Power nuclear-generating station in Ontario.

On Monday, Alberta Minister of Energy and Minerals suggested SMR projects could accomplish a range of ambitions, including those for Alberta’s oil sands, one of the world’s largest deposits of crude oil. “Alberta is focused on being a leader in delivering a reliable, affordable, and decarbonized energy system so our province can grow, prosper, and excite others to do the same,” he said. “SMRs are a critical component of the clean power generation supply mix and hold promise for the oil sands.” Alberta will “look forward to working with Capital Power and OPG in creating the right framework to eventually bring SMRs onto Alberta’s power grid,” he said.

—Sonal Patel is a POWER senior associate editor (@sonalcpatel, @POWERmagazine).

Editor’s Note: This story is currently evolving and subject to change. We encourage you to revisit this article or check our website for the latest updates.